Offshore Bonds: A Modern Structure for Cross-Border, Multigenerational Wealth
Jun 25, 2025
At Waugh McDonald Wealth Management, we serve globally connected families, many with deep ties to Kenya and family and financial interests that span continents. These families face a unique challenge: how to structure wealth in a way that is tax-efficient, portable, and aligned with both current needs and future generations.
One of the most effective tools we use to meet this challenge is the offshore bond. Whether structured as a capital redemption contract or a life assurance policy, offshore bonds offer a modern, flexible solution for cross-border wealth management. In many cases, these structures align with the principles of Private Placement Life Insurance (PPLI) a sophisticated, institution-grade approach to managing wealth through insurance-wrapped investment portfolios.
Why Offshore Bonds?
We do not recommend offshore bond structures because they simplify our work, on the contrary, they often introduce additional complexity. However, we incorporate them into our clients’ strategies when they offer clear, long-term advantages. When the objective is to preserve, grow, and transfer wealth across borders and generations, these structures can provide unmatched flexibility, control, and efficiency.
Cross-Border Portability
Offshore bonds are designed to move with you. Whether you’re based in Nairobi, London, Dubai, or Sydney, these structures remain effective across jurisdictions. That’s critical for families with members living in different countries or planning future relocations.
Tax Efficiency
Investments within an offshore bond grow in a tax-deferred environment. This gives clients control over when and how tax is paid, an essential feature for those navigating multiple tax regimes or planning for liquidity events like property sales, business exits, or education funding.
Estate & Succession Planning
Offshore bonds support beneficiary nominations and can be held in trust, making them ideal for multigenerational planning. Trusts can be established by the client directly, or arranged through a financial institution, an independent trustee, a company, or even a trusted individual. This flexibility allows families to tailor their estate planning to their specific governance preferences and family dynamics. Holding a bond in trust can help avoid probate delays, preserve confidentiality, and ensure that wealth passes according to your wishes, not just local inheritance laws.
Bespoke Investment Access
These structures support open architecture investing. That means clients can hold a wide range of assets, from global equity funds and fixed income to structured notes and private investments, within a single, consolidated portfolio. This flexibility allows us to tailor strategies to each family’s goals, risk appetite, and legacy vision.
Two Structures, One Purpose
Capital Redemption Bonds
These are long-term investment contracts with no life cover. They’re ideal for clients who want a predictable, tax-efficient structure to hold and grow wealth often over multiple generations. They can also be used to wrap bank deposits or investment portfolios in a more strategic format.
Life Assurance Bonds
These offer a modest life cover and are particularly effective for estate planning. They are whole-of-life policies, meaning they remain in force until the death of the last life assured, at which point the proceeds are paid directly to nominated beneficiaries or into a trust. When structured appropriately, these policies can mirror the benefits of PPLI, combining insurance protection with institutional-grade investment access and tax deferral.
A Modern Solution for the Modern Family
For globally mobile families with Kenyan roots and international ambitions, offshore bonds represent a modern solution to an age-old challenge: how to grow, protect, and pass on wealth across borders and generations. Whether used to wrap a discretionary portfolio, hold strategic cash reserves, or integrate with a family trust, these structures offer clarity, control, and continuity.
At Waugh McDonald, we design legacies. Offshore bonds, particularly when aligned with PPLI principles, are one of the ways we help our clients build financial structures that are as dynamic and global as their lives.
For guidance on managing your family's financial matters, please reach out to us at info@waughmcdonald.co.ke.
